Three-wheeled Elio gets closer to going on sale

The Elio, a three-wheeled prototype vehicle, in Royal Oak, MichAssociated Press

Instead of spending $20,000 on a new car, Paul Elio is offering commuters a cheaper option to drive to work.Associated Press

Associated Press

ROYAL OAK, Mich. -- Your next commuter car could have two seats, three wheels and get 84 miles to the gallon.

Elio Motors wants to revolutionize U.S. roads with its tiny car, which is the same length as a Honda Fit but half the weight. With a starting price of $6,800, it's also less than half the cost.

Phoenix-based Elio plans to start making the cars next fall at a former General Motors plant in Shreveport, Louisiana. Already, more than 27,000 people have reserved one. Elio hopes to make 250,000 cars a year by 2016. That's close to the number Mazda sells in the U.S.

Because it has three wheels -- two in front and one in the rear -- the Elio is actually classified as a motorcycle by the U.S. government. But Elio Motors founder Paul Elio says the vehicle has all the safety features of a car, like anti-lock brakes, front and side air bags and a steel cage that surrounds the occupants. Drivers won't be required to wear helmets or have motorcycle licenses.

The Elio's two seats sit front and back instead of side by side, so the driver is positioned in the center with the passenger directly behind. That arrangement, plus the low seating position -- the Elio is just 54 inches tall -- and the lack of power steering take a little getting used to.

But after a couple of spins around the block in this Detroit suburb, it felt like any other small car. That's partly because its two front wheels stick out by a foot on both sides, aiding balance and preventing the vehicle from tipping. The Elio has a three-cylinder, 0.9-liter engine and a top speed of more than 100 miles per hour. It gets an estimated 84 mpg on the highway and 49 mpg in city driving.

Elio keeps the costs down in several ways. The car only has one door, on the left side, which shaves a few hundred dollars off the manufacturing costs. Having three wheels also makes it cheaper. It will be offered in just two configurations -- with a manual or automatic transmission -- and it has standard air conditioning, power windows and door locks and an AM/FM radio. More features, such as navigation or blind-spot detection, can be ordered through Elio's long list of suppliers.

Germany's Daimler also promised to revolutionize American commutes with the Smart car, but that hasn't panned out, says Karl Brauer, a senior analyst with Kelley Blue Book. Smart sold just 9,264 cars in the U.S. last year.

The Smart has a starting price of $13,270 for a gas-powered car and gets 38 mpg on the highway -- not enough savings or fuel economy to justify sacrificing comfort in the tiny car. But, Brauer said, the equation might work in the Elio.

"If it really gets 84 mpg and doesn't drive terribly, it would justify the compromises you're making in size and comfort," he said.

Elio will also save money by selling the cars directly through its own stores and not through franchised dealers, similar to electric car maker Tesla Motors. Elio plans stores in 60 major metropolitan areas. They'll be serviced by car repair chain Pep Boys.

Paul Elio, a one-time stockbroker and New York City cab driver, dreamed as a kid that he would one day own a car company called Elio Motors.

"As I matured I decided that was as likely as playing in the NFL," Elio told The Associated Press. But he did earn an engineering degree at General Motors Institute -- now Kettering University -- and started his own company engineering products like children's car seats.

In 2008, tired of high gas prices and the country's dependence on foreign oil, he started working on a fuel-efficient car. Equally important to him was creating U.S. manufacturing jobs and making the car inexpensive enough to appeal to buyers who might otherwise be stuck in old, unreliable clunkers.

"Whatever matters to you, this can move the needle on it," he said.

The recession killed his engineering company, but it also provided the opportunity to buy the Shreveport plant when GM filed for bankruptcy protection. Elio Motors plans to employ 1,500 people at the plant.

The company has also applied for a $185 million advanced vehicle development loan from the U.S. Department of Energy.

Paul Elio said so far, reservation holders are older, more affluent buyers who will use the Elio as a second or third car for commuting.

"It's an 'and' purchase for a lot of folks," he said. "So keep your SUV or your minivan or your large sedan, and when you're driving back and forth to work all by yourself, take the Elio. At this price point and this mileage, that works financially for folks."

Eventually, though, he believes the car will appeal to high school and college students as well as used-car drivers who want something newer and more reliable. He also hopes to eventually export it to other countries.

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